Marketing, advertising & media intelligence

The Warehouse has transformed its offering in recent times, allocating $430 million over five years to refit its stores, improve the customer experience, increase the number of staff on the floor, stock a better range of products and brands and communicate the offer more effectively with the market. That's led to nine consecutive quarters of profit growth and an increase in sales to $1.55 billion. But while its regular customers were aware of all the improvements, those who had written it off years ago still had some engrained negative perceptions. So, with the help of DDB, it's faced up to them with The Warehouse Challenge.

DDB's chief executive Justin Mowday was keen to emphasise the fact that this campaign was done for real, with a focus group that asked for people's opinions on a range of retailers used to identify those who no longer shopped at The Warehouse. First in line for the challenge were Anneke Pinker and TauvagaSiolo from Auckland, who didn't think there was anything for them at The Warehouse.

“We had no idea what we were in for when we arrived at the [Mt Roskill] store," says Pinker. "We were kept in the dark right up until the cameras started rolling. It was very exciting to find out about the challenge although we didn’t have much time to think about it. Suddenly it was all go! We have a baby on the way so it was so lovely for us to get this opportunity to take home some items that will really help us get set up to start our new family. The timing was perfect.”

Mowday says chief executive Mark Powell, who started in early 2011 and has worked with Tesco, Walmart and Warehouse Stationery, has been instrumental in the transformation of the business. And his belief was that the product needed to be fixed before perceptions could be changed. Now that goal has been achieved, it's starting to shout about it. But, as Mowday says, it's doing it in an interesting fashion by openly admitting that it has some perception issues.

"That timetable of how things were done is incredibly professional and to put some communication to air that where you admit that someone doesn't see you in a positive light and have them say 'no, I wouldn't shop there' is incredibly brave."

But, as he says, you can still have a core of honesty, as long as it's resolved in the end, which is exactly what this ad aims to do.

He says The Warehouse started establishing its new position about one year ago with the 'What Kiwis Want' campaign (this replaced the short-lived pratfalling anthropomorphic kiwi that had come before it, which didn't seem like a particularly good way to change perceptions from cheap and cheerful to a quality retailer that understood the culture and could meet customers' expectations). The Warehouse insights team provided data from the chain's 900,000 weekly shoppers to DDB, which then brought those stats to life. The brand campaign aimed to reconnect with New Zealanders on an emotional and truly Kiwi level, and retail executions for over 150 special trade events resulted in over 230 TVCs, 180 press ads, 120 mailers and 125 radio executions each year—all while housing specific weekly price and product deals.

"And this campaign is the next evolution of the 'What Kiwis Want' campaign, because we're talking to the people who have doubted us the most."

The Warehouse has also put a lot more emphasis on online shopping since Powell arrived, with a huge increase in the number of products available. And now its online sales are equal to those of its biggest physical store.

While Mowday says people don't think of DDB as a retail agency, it does have some big retail clients (along with The Warehouse, it works with McDonald's, it does a lot of work in New Zealand and in the Pacific for Exxon Mobil, and New Zealand Lotteries, which, with 1,400 outlets, is one of New Zealand's biggest retail networks).

"We believe that retail should still be engaging and we believe it should have an idea that makes the message entertaining," he says.

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On Monday, Whittaker’s launched its latest novelty chocolate-lolly mash up with a chocolatey answer to retro bakesale treat coconut ice. The Coconut Ice Surprise chocolate has a twist though, 20c from each block goes to Plunket – a charity which New Zealanders agree is a worthy cause. However, to relate the chocolate to the charity, Whittaker's has built the campaign around baby gender reveal parties, causing a backlash from the public who argue gender norms have expanded beyond blue for boys and pink for girls.

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